v3.25.4
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock‑Based Compensation
Stock-based compensation expense is as follows (in thousands):
Year Ended December 31,
202520242023
Cost of revenue$39,103 $44,736 $80,213 
Research and development189,676 261,458 290,160 
Sales and marketing71,639 129,037 143,461 
General and administrative84,796 161,018 134,862 
Total stock-based compensation expense$385,214 $596,249 $648,696 
Included in the above expenses for the year ended December 31, 2025 and 2024, are $13.0 million and $93.8 million respectively, of incremental stock-based compensation expense from modifications, primarily within general and administrative. These amounts predominately relate to modifications of awards held by departing executives in the fourth quarter of 2025, and the founders of ironSource Ltd. that departed in the first quarter of 2024, respectively.
Unrecognized compensation expense is as follows (in thousands, except for weighted-average remaining vesting period):
December 31, 2025
Unrecognized Compensation ExpenseWeighted-Average Remaining Vesting Period (In Years)
Outstanding stock options and PVOs
$22,469 2.14
Unvested RSUs and PVUs$572,033 2.63
ESPP$1,327 0.17
In future periods, stock-based compensation expense may increase as we issue additional equity-based awards to continue to attract and retain employees.
Stock Options
A summary of our stock option, including price-vested options ("PVO"), activity is as follows:
Options Outstanding
Stock
Options
Outstanding		Weighted-Average
Exercise
Price		Weighted-Average
Remaining
Contractual
Term
(In Years)
Balance as of December 31, 202331,541,466 $19.35 4.79
Granted
3,187,067 $21.65 
Exercised(8,790,694)$6.20 
Forfeited, cancelled, or expired(2,779,627)$48.96 
Balance as of December 31, 202423,158,212 $21.10 4.24
Granted206,244 $24.72 
Exercised(9,245,255)$10.90 
Forfeited, cancelled, or expired(1,644,854)$46.34 
Balance as of December 31, 202512,474,347 $25.39 4.40
Exercisable as of December 31, 20259,915,246 $26.17 3.35
(1)    The intrinsic value is the difference between the estimated fair value of our common stock on December 31, 2025 and the exercise price for in-the-money options.
A summary of intrinsic and fair values of our stock options is as follows (in thousands, except fair value amounts):
Year Ended
December 31, 2025December 31, 2024December 31, 2023
Aggregate pretax intrinsic value of stock options exercised (1)
$210,329 $155,558 $127,722 
Weighted-average grant-date fair value of stock options granted$16.38 $13.34 $18.64 
Fair value of stock options vested$19,696 $46,933 $68,008 
(1)    The intrinsic value is the difference between the estimated fair value of our common stock on the date of exercise and the exercise price for in-the-money options.
Restricted Stock Units
A summary of our restricted stock units ("RSU"), including price-vested units ("PVU"), and performance-based restricted stock units ("PSU"), activity is as follows:
Unvested RSUs
Number of
Shares		Weighted-Average
Grant-Date
Fair Value
Unvested as of December 31, 202337,332,551 $38.31 
Granted20,546,590 $19.32 
Vested(14,666,692)$38.88 
Forfeited(13,199,174)$36.05 
Unvested as of December 31, 202430,013,275 $26.03 
Granted15,922,107 $25.81 
Vested(13,002,226)$28.73 
Forfeited(8,005,434)$23.85 
Unvested as of December 31, 202524,927,722 $25.18 
The total fair value of RSUs vested as of the vesting dates during the years ended December 31, 2025, 2024, and 2023 was $414 million, $330 million, and $448 million, respectively.
Price-Vested Options and Price-Vested Units
The vesting for each of the PVOs and PVUs is subject to the fulfillment of both a service period that extends up to four years and the achievement of a stock price hurdle during the relevant performance period that extends up to six and seven years, respectively. The fair value of each PVO and PVU award is estimated using a Monte Carlo simulation that uses assumptions determined on the date of grant. During the year ended December 31, 2025, the price hurdle on 420,000 outstanding PVOs was met, resulting in those units vesting. No other outstanding options or units, which had not already met their price hurdle in a prior period, attained their price hurdle in this period.
Performance-Based Restricted Stock Units
Starting in the first quarter of 2025, we have issued PSUs to certain executives as part of their compensation. The vesting for each PSU is subject to the fulfillment of both a service period of three years, and the level of achievement of certain performance goals (revenue and EBITDA metrics), over three annual performance periods ("tranche"). These goals are set as a range of target outcomes, in the first quarter of each year, and can be attained at a rate between 0% and 150%, based on where in the range the final results fall. The fair value of each PSU is estimated separately for each tranche of the award, using the closing price of Unity's common stock on the day the performance goals are set for that
tranche. The expense is the fair value of the award multiplied by the expected attainment of the related performance goals as of the balance sheet date, recognized ratably for each tranche over the period between the day the performance goal is set, and the end of the service period. The expense is adjusted each period for any changes in the expected attainment of the performance goals.
Fair Value Assumptions
The calculated grant-date fair value of stock options, PVUs, and PVOs granted, were estimated using the Black-Scholes option-pricing model for stock options, and a Monte Carlo stimulation for the PVUs and PVOs, with the following assumptions:
Year Ended
December 31, 2025December 31, 2024December 31, 2023
Expected dividend yield———
Risk-free interest rate4.1%
3.5% - 4.4%
3.8% - 4.9%
Expected volatility69.5%
60.0% - 68.0%
54.7% - 65.8%
Expected term (in years)6.25
6.25 - 10.00
6.25
Fair value of underlying common stock$24.72
$15.60 - $26.89
$28.13 - $39.29
Employee Stock Purchase Plan
The fair value of shares offered under our ESPP was determined on the grant date using the Black-Scholes option pricing model. The following table summarizes the assumptions used and the resulting grant-date fair values of our ESPP:
Year Ended December 31,
202520242023
Expected dividend yield———
Risk-free interest rate
4.0% - 4.3%
4.9% - 5.3%
5.2% - 5.5%
Expected volatility
72.4% - 73.4%
49.3% - 56.0%
65.9% - 94.5%
Expected term (in years)0.500.500.50
Grant-date fair value per share
$9.26 - $14.03
$4.82 - $9.11
$12.44 - $12.65
Additional information related to the ESPP is provided below (in thousands, except per share amounts):
Year Ended December 31,
202520242023
Shares issued under the ESPP1,133,0711,161,6041,064,463
Weighted-average price per share issued$16.50$19.13$25.56